Motor Insurance Made Easy

Driving a vehicle comes with a responsibility, of safety, both for you and for fellow passersby. With the high toll of accidents and traffic injuries on the Indian roads, it is most justified why the government has made motor insurance mandatory for all vehicle owners. It covers you against losses arising out of accidents, damage or other calamities. So whether it is a car, scooter or motorcycle, motor insurance is a necessity. Here is a comprehensive look on insuring your vehicle and protecting yourself from losses arising out of unforeseen events.

The Two Variants of Motor Insurance

Motor Insurance could be broadly classified into two kinds.

Third Party* Liability Insurance

This option covers any losses arising from death, bodily injury or damage to third party or to his property, caused from your vehicle. It does not protect or offer any cover to you or to your vehicle. So any damage to your vehicle would be borne by you.

*Meaning of Third Party- Third Party means all people other than the person insured. This could be pedestrians on the road, or a person travelling in another vehicle.

Comprehensive Motor Insurance

A comprehensive insurance offers cover against loss or damage to the vehicle by accident, fire, earthquake, riots, lightening, theft or explosion, plus the above mentioned third party cover. A comprehensive cover of course comes at a higher premium. Though optional, this insurance cover is highly recommended to protect oneself and asset against any unforeseen calamities that may occur on the road.

What is covered and what is not

Here is what you could expect in your motor insurance policy.

Exclusions

Exclusions under a motor insurance policy are those conditions under which a claim would not be entertained.

An important point to keep in mind here is that when it comes to accessories in a vehicle; the comprehensive policy automatically takes care of those which are factory fitted in the vehicle. However for those accessories fitted in the vehicle at a later stage you would have to pay an additional amount if you desire to include them in your policy.

Premiums on Motor Insurance

The premium that you would pay for insuring your vehicle depends on certain factors. Here is a sneak peak.

The IDV of the vehicle– IDV or Insured’s Declared Value is the value of your vehicle that is arrived at after adjusting depreciating value from the current selling price of the vehicle. When calculating IDV, the selling price considered will not include registration and insurance cost of the vehicle.

Basic features of the vehicle- Features such as make, class model, fuel type and also number of kilometers it has run.

Area of registration of the vehicle- Insurance premium varies from place to place. Generally Tier I cities have higher premiums than other cities.

The driver’s characteristics- The age of the driver, past driving history and experience are also important determining factors.

Cashless Settlement on Motor Insurance

Many insurance companies have tie ups with various garages and motor mechanics across the country to offer the benefit of cashless settlements. At such places your vehicle could be serviced, as per the provision under the insurance policy. It thus makes claims quicker and easier without the requirement of an authorization. You must however approach only the authorized garage as per your insurance policy to avail cashless settlements.

Motor Insurance Duration

Motor insurance policies have a validity of only a year. So remember, to renew your policy annually.

Benefit of No Claim Bonus

No claim bonus or discount is a benefit given to the insured for claim free years. If you haven’t had any claim on your insurance policy in a period of twelve months, insurance companies offer you a certain percentage discount on your next renewal. This discount increases with the number of no claim years’ increase. No claim bonus pertains to the policy holder and not to a particular vehicle. Therefore, even if you sell your vehicle you could still avail of your no claim bonus from your insurance company, and use it on another policy for another vehicle, within a span of three years.